Read in the Digest
- Inflation behind Bitcoin’s New $69K All-Time High, Evergrande Defaults on Interest Payments
- Terra (LUNA) Hits All-Time High as Community Passes Burn Proposal
- SEC Halts Registration of Two Digital Tokens, Half of American Millennials Are Comfortable with Crypto Investment
- Twitter Is Building a Crypto Team, Tencent Believes It Can Support the Metaverse
Inflation Behind Bitcoin’s New $69K All-Time High, Evergrande Defaults on Interest Payments
After setting an all-time high at $68.5k, the price of Bitcoin hit another all-time high at $69,000. Experts have opined that Bitcoin’s push to a new ATH results from investors looking to dodge rising inflation.
On Wednesday, U.S. stocks declined slightly as inflation in the country hit a 30-year high. The likes of Jack Dorsey and Elon Musk have voiced their fears about hyperinflation, and crypto analyst Simon Peters believes inflation is linked to Bitcoin’s ATH. He noted:
"Not only is it a signal that the market is extremely averse to inflationary pressure, it is a sign investors are now firmly using bitcoin as a hedge against rising prices."
Bitcoin’s rise did not last long, as traders began taking profit, leading to a nearly $7,000 price drop. Bitcoin is finding its way back after falling to $63k. BTC now trades at $65,183.
The 7-day price chart of Bitcoin (BTC). Source: Tradingview
- China’s Evergrande Group has once again defaulted on interest payments, with DMSA preparing to file for bankruptcy against China’s second-largest real estate developers
- The last time news emerged that Evergrande could go under due to debt, major markets collapsed, including the crypto market
Why You Should Care
The effect of inflation and the bankrupt Evergrande on the crypto market recapitulates the fact that cryptocurrencies remain connected to the real world
Terra (LUNA) Hits All-Time High as Community Passes Burn Proposal
Burning, or the process where miners and developers remove a specific portion of a coin from circulation to control the price, is becoming increasingly popular among crypto projects.
On Tuesday, the Terra community passed a proposal to burn 88.7 million LUNA tokens, worth roughly $4.5 billion at current prices. The project proceeded to burn 520,000 LUNA on Tuesday night, sending the price of LUNA on a rally.
The price of Terra (LUNA) peaked at $54.95 before retracing. Having gained more than 32% in the last month, LUNA now trades at $51.344. CoinMarketCap ranks it as the 12th largest crypto with a $24.8 billion market cap.
The 30-day price chart of Terra (LUNA). Source: Tradingview
The burn, which began on October 8, will be executed over the next two weeks. In all, the $4.5 billion token burn of Terra (LUNA) is one of the largest, if not the largest, layer-1 token burnings in crypto history.
- Terra’s co-founder Do Kwon has commented that the projects community pool is too large, and could be a systemic risk
Why You Should Care
Coin burns directly affect the dynamics of supply and demand by creating a deflationary effect. As more Terra (LUNA) is burnt, the price could rally even more.
SEC Halts Registration of 2 Digital Tokens, Half of American Millennials Are Comfortable with Crypto Investment
On Wednesday, the Securities and Exchange Commission halted the registration of two digital tokens offered by Wyoming-based American CryptoFed DAO LLC. The company is the first legally recognized decentralized autonomous organization (DAO) in the country.
The regulatory agency noted that American CryptoFed DAO offered insufficient and misleading information on their registration form. The SEC also alleged the company misstated and omitted information, including whether the Ducat and Locke tokens are securities.
Despite unfair regulatory frameworks, a Bankrate survey discovered that 49% of millennials in the United States are comfortable with investing in cryptocurrency.
The survey added that 15% of people in the age group of 25-40 years (millennials) answered that they are “very comfortable” with investing in cryptocurrency. The remaining 34% picked “somewhat comfortable.”
- Even with the surge in crypto investors, real estate and cash remain the preferred investments over the next ten years for American investors
Why You Should Care
The growth of the crypto industry has attracted sterner regulation. Hence, projects will need to become more compliant with regulations
Twitter Is Building a Crypto Team, Tencent Believes It Can Support the Metaverse
Less than two months after launching crypto tipping on its platform, Twitter has announced that it is further expanding into the cryptoverse with a new Crypto Team. According to Tess Rinearson, the head of Twitter’s crypto team, the initiative will extend beyond cryptocurrencies.
She explained that the initiative serves as a “center of excellence” for all things blockchain and web3 at Twitter. She explained that “as I build out the team, we’ll be working to figure out what crypto can do for Twitter, as well as what Twitter can do for crypto.”
In China, the world’s biggest gaming company, Tencent Holdings, believes it has the tech to support the “metaverse” virtual environment services. The company believes that Beijing doesn’t oppose the building of a metaverse.
However, regulators in China have banned all mining activities, crypto transactions, and tightened oversight of the gaming industry. As such, Tencent believes it must comply with the rules set by Chinese authorities in building a metaverse.
- The company acknowledged that China’s version of the metaverse would need to be different from the rest of the world’s.
Why You Should Care
More tech giants, including Twitter and Tencent, are exploring Web 3 and the metaverse, which are foundational technology for how the world will operate in the future.